NEW YORK – Express Inc – once a trendsetter in casual office wear that struggled to compete with firms like Zara and H&M – has filed for Chapter 11 bankruptcy protection.
The Columbus, Ohio-based retailer, founded in 1980, also announced Monday that it plans to sell the vast majority of its stores.
Express, the parent company of the Bonbons and UpWest brands, is closing a handful of stores because of this. In an announcement about its bankruptcy filing, the corporate said it plans to shut 95 of its Express Retail stores and all 10 of its UpWest stores. These include stores in Santa Clara (Valley Fair Mall) and Emeryville (Bay Street).
Sales at locations closing spanning greater than 30 states and Washington, D.C. are scheduled to start Tuesday. Beyond these closures, Express expects business operations to proceed as normal.
Also on Monday, Express said it had received a non-binding letter of intent from a bunch led by consumer brand acquisition and management firm WHP Global to potentially acquire a majority of its stores and operations. Express said it filed for Chapter 11 protection “to facilitate the sale process.”
According to Express, the consortium exploring the deal also includes shopping mall operators Simon Property Group and Brookfield Properties. WHP, Simon Property and Brookfield didn’t immediately reply to requests for comment on Monday.
Express CEO Stewart Glendinning said WHP has been “a strong partner” with the corporate since 2023 – adding that the proposed transaction would supply Express with additional financial resources and put it in a greater position to grow profitably while maintaining value for stakeholders to maximise.
According to Express's website, along with its UpWest stores, the corporate operates roughly 530 Express retail and Express Factory Outlet stores within the United States and Puerto Rico, in addition to roughly 60 Bonobos Guideshop locations and online stores for those brands.
Express reported total debt of nearly $1.2 billion and total assets of $1.3 billion in its Chapter 11 filing March 2 within the U.S. Bankruptcy Court for the District of Delaware.
The company initially began as a women's fashion provider after which expanded into men's fashion. It offered must-have items like denim dresses for those searching for trendy outfits at work, at reasonably priced prices.
But increasing competition from fast-fashion firms like H&M, in addition to the rise of Old Navy and athleisure brands like Lululemon, hurt the brand's sales, said Neil Saunders, managing director of market research firm GlobalData. Saunders also noted that the brand has been affected by quality issues and the pandemic has accelerated the work-from-home trend, reducing the necessity for shoppers to buy workwear.
“Everyone has been chomping at Express from all sides, and Express doesn’t have a defensible proposal,” Saunders said.
Express joins a handful of shops which have filed for Chapter 11 to date this yr, including fabric and crafts retailer Joann. And analysts expect the variety of bankruptcy filings this yr to be concerning the same level (near 24) as last yr, as buyers hampered by high levels of consumer debt remain cautious, the auditor said – and consulting firm BDO, which tracks personal bankruptcies.
According to BDO, only five retailers have filed for bankruptcy in 2022. The figure appeared to point a recovery from the pandemic-related store closures that pushed struggling businesses into crisis in 2020, because the variety of retail bankruptcies rose to 35 from 21 a yr earlier, BDO said.
Express said Monday that it has a commitment from some existing lenders for $35 million in latest financing, which is subject to court approval. This can be along with the $49 million in money the corporate received earlier this month from the Internal Revenue Service related to the pandemic-era CARES Act.
Express also announced a leadership update on Monday. Mark Still will change into chief financial officer effective immediately after serving as interim CFO since November 2023, the corporate said.
image credit : www.mercurynews.com